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The IT industry has a reputation for forward thinking and new ideas. And yet, when it comes time to reform the way entire companies do business, sometimes it pays to look to history.

In the late 1980s, Mikhail Gorbachev, then premier of the Soviet Union, embarked on a radical program of restructuring. Recognizing that his country’s intractable, closed-door style of governance had been partly responsible for stifling its economic growth, Gorbachev worked aggressively to encourage public discourse and to increase the transparency of the Soviet political process. He called this new policy “glasnost” -- a Russian word meaning “openness.”

Similarly, openness has become the watchword of the software industry. At one time, control of the enterprise application stack rested in the hands of a small number of powerful, monolithic companies. Today, open standards and the open source movement are transforming the relationships between software vendors and their customers.

BEA, IBM, Microsoft, Novell, Oracle, Sun Microsystems -- the list of companies that have begun experimenting with their own forms of glasnost reads like a roll call of the industry’s heaviest hitters. And yet, each company has taken a slightly different approach, and not every attempt at openness is created equal. For customers, determining the true value proposition of each vendor’s offerings can be a difficult task.

Better behavior

“There is a move to the middle in the industry,” says Jason Matusow, director of Microsoft’s Shared Source program. “If you look back into the late ’90s, there was a great deal of very strongly held beliefs -- without very much technology associated with them -- regarding the open source community.”

Microsoft has long been one of the most vocal detractors of the open source movement, arguing that the dedicated developer and support resources of commercial vendors offer a superior value for enterprise customers. Yet not even Microsoft is immune to pressure from customers to open up its products.

“You start to get into this very strange scenario where everybody is saying how much they need open source,” Matusow says. “But is it open source they need? Or are they looking for better behavior from their vendors and how they work with their communities of customers and partners and the governments in the countries in which they work?”

For Microsoft, one example of better behavior is its Shared Source initiative, which gives customers access to source code of several of the company’s prominent products, including Windows and Office. Make no mistake: Shared Source is not open source. The code is offered only to select customers, under the terms of what Microsoft calls a “reference grant” -- essentially, look but don’t touch.

Open source advocates may decry this gesture as a disingenuous effort to appeal to the community, but they may also be surprised to learn that Shared Source isn’t Microsoft’s only move toward openness. In fact, Microsoft has released three true open source projects under the Common Public License and has even made code contributions to the Free Software Foundation’s GCC (GNU C Compiler) under the GNU GPL (General Public License), widely considered the antithesis of Microsoft’s own commercial licensing schemes.

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According to Matusow, there’s no contradiction here. He describes Microsoft’s source code licensing efforts as “a spectrum approach,” with terms tailored to what is appropriate for each specific product. Greater access to Windows code would be of little benefit to customers, he says, because no enterprise would want to take on the responsibility of maintaining its own custom version of the OS.

“The primary use for having Windows source code is as a reference mechanism,” Matusow says, “an encyclopedia, as it were, that I could turn to if I’m creating a custom application on top of Windows and I want to look at those interfaces and really understand how they work.”

Giving it away

IBM has pursued open source much more aggressively than its Redmond-based rival has. But in truth, the two companies see the market for open software in similar terms.

“I think it’s quite true that for an awful lot of business people and consumers of technology, access to source code isn’t terribly important,” says Doug Heintzman, director of technical strategy at IBM’s software group.

Heintzman cites the relatively small number of organizations that employ development teams with sufficient expertise to tackle a code base as complex as that of Windows, or indeed the Linux kernel. He says that with the exception of those working on very specialized projects, such as embedded systems, few organizations will ever touch a line of open source code.

Unlike Microsoft’s Shared Source program, part of the openness of true open source projects is a license to freely distribute the code, which virtually eliminates the originating company’s ability to profit from per-seat or per-site licensing. So why, then, would IBM turn sophisticated products such as the Eclipse development environment or the Cloudscape embedded Java database -- which Heintzman says represent tens of millions of dollars of development investment -- over to the open source community?

The answer is that IBM expects to see returns in other ways. Cloudscape and Eclipse, in particular, have been warmly embraced by Java developers. IBM hopes that their free availability will serve to stimulate and encourage the Java development community -- from which IBM, with its industry-leading WebSphere J2EE platform, stands to profit greatly.

But Heintzman believes open source has direct benefits for customers, as well. Even if few companies modify open source code at the organizational level, a large number of independent developers regularly contribute. Heintzman compares open source development to a “matching grant program,” in which every investment IBM makes in a body of code is multiplied by contributions from around the globe.

“A lot of the value of open source projects is because there’s this community of highly skilled, highly motivated people that are continually evolving the project,” Heintzman says. “It’s a similar value proposition to the one that’s behind the eBay and Google and Amazon phenomena, where the size of the community is in direct proportion to the value of the community and how quickly it evolves and moves.”

Competing in the open

Open source isn’t IBM’s bread and butter. Although it has adopted open source code and methods at every level of its software business, Big Blue still retains a portfolio of mature, highly successful proprietary products -- such as the DB2 Universal Database.

In fact, the success of DB2 -- as well as that of competing products from Microsoft and Oracle -- was among the things that led Computer Associates to open source its own Ingres database management system. According to Tony Gaughan, CA’s senior vice president of product development, the idea was to draw on the community to develop Ingres in innovative ways that neither CA nor its competitors may have considered.

Although Gaughan doesn’t expect many enterprises to get actively involved in developing Ingres, he says the broader developer community has already made significant contributions, including a module that will allow applications written for Oracle’s PL/SQL query language to run atop Ingres databases.

“One of the other benefits we see in open source is just actually increasing that community,” Gaughan says. “So we get a QA organization that substantially grows because there are more people interested in the product; and it also builds mind share.”

For CA, the fact that open source projects are available to customers free of charge is a powerful tool. “Obviously, the ongoing cost if you move to Ingres goes from being whatever it is with Oracle to zero, from a licensing perspective,” Gaughan says.

More importantly, this in turn reduces the total cost of CA’s other, proprietary software solutions, which rely on relational databases for storage. By offering the option of a fully supported, open source database solution, CA eliminates the need for its customers to purchase additional software licenses from companies such as IBM and Oracle. It’s a strategy similar to that of Novell, which offers a suite of sophisticated networking infrastructure products built on an open source Linux foundation.

“The clear indication here is that the technology stack is becoming commoditized. There’s no real intrinsic value in that stack for the customer,” Gaughan says. “I think our value-add is certainly going to come from the management expertise that we have, not necessarily the technology stack that we build things on.”

The customer is king

In many ways, the big vendors have no choice but to contend with open source. According to Bruce Perens, a consultant and one of the founders of the open source software movement, open source isn’t something the software companies are presenting to their customers -- rather, it’s the other way around.

“Who has the biggest economic effect? Is it open source? Is it Microsoft? It’s actually the customers,” Perens says. “The customers and their businesses that are enabled have much larger economic effect than Microsoft ever could. IBM and Novell and Red Hat could invest as much as they want, and it will not sustain [open source] like having ten thousand customer organizations making that investment.”

What this means is that, although large software vendors such as CA, IBM, Microsoft, and Novell aren’t likely to disappear in the near future, the days when they can afford to be complacent are certainly over. In Gorbachev’s Soviet Union, the companion to glasnost was “perestroika” -- economic restructuring. Similarly, for the software industry, achieving openness is only half the equation. The other half lies in finding new ways to profit and grow in a software market radically transformed by the ascendancy of open source and open standards.

“It’s up to us to adjust our business models to incorporate the reality [of open source projects] to celebrate their success, and to leverage them, and to continue to innovate at levels of the stack that our customers deem as being valuable,” IBM’s Heintzman says.

That process of adjustment is still ongoing, and not all the players agree on which direction to take. But that’s not a bad thing. The result is an ever-increasing number of options, as software vendors continue to experiment with new ways to develop, distribute, support, and increase community around their products. The movement toward openness isn’t a race, and it’s unlikely any clear winners will emerge. In a market this rich with alternatives, however, the customer certainly can’t lose.